Strategic Frameworks for Project Justification

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Strategic Frameworks for Project Justification

• MIS 5113

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Organization Goals

• Business
• Vision
• Mission
• Objective
• Tactic
• Business Justification

• IS
• Vision
• Mission
• Objective
• Tactic
• Project Contribution

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Roles

• Sponsor funds and champions the project in the
  organization
• Client reviews the project milestones and
  decision points from the business point of vies
• User works with the system on a regular basis

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Strategic Information Systems

• IS that help gain strategic advantage
• Significantly change manner in which business
  supported by the system is done
• Outwardly aimed at direct competition
• Inwardly focus on enhancing the competitive
  position
• Create strategic alliances

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Firm Infrastructure(general management,
accounting, finance, strategic planning)
Support Activities
Human Resource Management (recruiting, training,
development)
Technology Development (RDlt product and process
improvement)
Procurement (purchasing of raw materials,
machines, supplies)
Inbound Logistics (raw materials handling and ware
hous- ing)
Outbound Logistics (warehous- ing
and distribution of finished product)
Marketing and Sales (advertising, promotion, prici
ng, channel relations)
Service (installation, repair, parts)
Operations (machine assembling, testing)
Primary Activities
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Value Chain Model

• Chain of basic activities that add to firms
  products or services
• Primary activities
• Secondary activities

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Value Chain Primary Activities

• Inbound
• Outbound
• Operations
• Marketing and Sales
• After-Sale Services

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Value Chain Support Activities

• Technology development
• Procurement
• Human Resources Management
• Management Control
• accounting/finance
• coordination
• general management
• central planning

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Competitive Forces

• Threat of entry of new competition
• Bargaining power of suppliers
• Bargaining power of buyers
• Threat of substitute products or services
• Rivalry among existing firms

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Strategies for Competitive Forces

• Note - strength of force is determined by
  factors in industry
• Gain a competitive edge
• Build defenses against forces
• Formulate actions to influence forces

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Three Generic Strategies

• Cost leadership (lowest cost in industry)
• Differentiation (of products/services/quality)
• Focus (finding a specialized niche)

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Be Low Cost Producer - IT strategic if it can

• Help reduce production costs clerical work
• Reduce inventory, accounts receivable, etc.
• Use facilities and materials better
• Offer interorganizational efficiencies

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Produce Unique Product - IT strategic if it can

• Offer significant component of product
• Offer key aspect of value chain
• Permit product customization to meet customers
  unique needs
• Provide higher/unique level of customer
  service/satisfaction

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Fill Market Niche - IT strategic if it can

• Permit identification of special needs of unique
  target market
• Spot and respond to unusual trends

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Strategic Questions

• Can IT create barriers to entry? (new entrants)
• Can IT build in switching costs? (buyers)
• Can IT strengthen customer relationships? (buyers)

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Strategic Questions (cont)

• Can IT change the balance of power in supplier
  relationships? (suppliers)
• Can IT change the basis of competition?
  (competitors)
• Can IT generate new products?(competitors,
  substitutes)

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Risks of IS Success

• Change the Basis of Competition
• Lower Entry Barriers
• Promote Litigation or Regulation
• Awake Sleeping Giant
• Reflect Bad Timing
• Are Too Advanced

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Transformational Information Systems

• Radical changes in an organizations business
  processes
• Radical changes in an organizations structure
• Radical changes in an industrys value streams

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Business Process Reengineering (BPR)

• Completely changes manner in which business is
  done
• Fewer steps, shorter cycle times
• Complete, more expert handling of events
• Not incremental improvement
• Typically uses IT as an enabler
• Involves discontinuous thinking

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Characteristics of BPR

• Combining jobs
• Empowering employees
• Jobs done simultaneously
• Customizing product/service
• Work performed where most logical
• Single point of customer contact

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Transformational Information Systems

• Radical changes in an organizations structure
• reduce layers of management
• empower front-line workers
• loosely couple work units
• Radical changes in an industrys value streams
• disintermediation
• creating new markets